Fast-emerging competition, societal and lifestyle shifts, technological advances, and shifting business models are just some of the trends contributing to the enormous changes occurring in the workplace benefits landscape today. What's more, the speed of change that employers, brokers, and carriers will face in the future will only accelerate. In order to remain viable, one important question needs to be answered: How will these stakeholders handle the challenges they face today and tomorrow?

To help provide answers to this question and others, LIMRA invited industry executives to openly discuss their views as to where they believe the future of workplace benefits is headed. While these executives offered varied opinions as to the impact future trends would have on their businesses — given an increasingly diverse labor force and evolving employer-employee relationships — they agreed that past behavior is not necessarily the best predictor of future success, and the industry is becoming even more fragmented.

Two issues that garnered much of the discussion revolved around the future of the voluntary marketplace and technology.

The future of the voluntary market

Looking at the future of the voluntary market, industry executives expect that, despite demographic and workforce changes, employees will continue to look to their employers for benefits. However, they underscored the need to develop a better understanding of the changes occurring within the workforce; in particular, understanding the different needs of various employee groups at different life stages.

This is one area where advisors have an opportunity to bring greater value to employers. Current LIMRA research shows that less than half of employers agree that their advisors provide them with support in meeting the needs of a diverse workforce.

In addition, executives foresee the need to be flexible as employer and employee expectations change. Given the varied demographics of employees in the workforce, and the wide variety of benefits that might appeal to these different groups, employers may choose to take a more modular or defined contribution approach to benefits, in which employees are given a pot of money they can allocate to the benefits most relevant for them.

If this were to occur, benefit communications and education would take on greater importance. The future success of this market will depend in large part on how well employees understand the benefits offered and how they integrate with one another.

Executives also predict the need for more flexibility around premium collection methods. As payment methods evolve and new services like Venmo gain traction, some customers may want to move away from payroll deduction, meaning carriers and brokers will need to revise their business model to keep up with changing market conditions.

Technology's impact on the future

Technology continues to have a powerful impact on how employers manage benefits. Traditionally, they have utilized technology for payroll-deduction services. Today, however, nearly half of employers utilize technology to support human resources (HR) management functions, such as benefits administration and enrollment. And while technology is prevalent in all facets of benefits — marketing, sales, communication, enrollment, and administration — executives agree that the pace of change technology provides will only increase in the future.

These executives expect technology will have some of the greatest impact on the small employer market, as changes in technology will provide ways for carriers and brokers to reach and service this market more efficiently. One way to accomplished this is through "virtual broker services."

Industry executives also foresee the brokers' role evolving as a result of technology. They envision technology freeing brokers from certain tasks, while simplifying others. As a result, many services will be automated, allowing brokers to expand their consultative services and move towards a fee-based approach.

Moreover, employers will increasingly rely on brokers for assistance in understanding the changing regulatory environment, as well as providing them with the information and trends they need to make informed technology decisions. Since many HR professionals lack IT support, brokers' assistance in understanding the changing needs of HR departments will only grow.

The future is coming. The only question that remains is: Will the industry be proactive or reactive to the changes ahead?

Anita Potter oversees LIMRA's Workplace Benefits Research program. With over 25 years of employee benefits research experience, Anita helps companies understand the trends affecting the current employee benefits landscape.

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Exploring the future of employee benefits

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